Crypto custody bank Anchorage Digital is expanding its services into crypto-backed loans for institutional investors.
Clients at Anchorage can now access a line of USD credit backed by Ethereum through its partnership with U.S. commercial bank BankProv.
Anchorage Financing will introduce a simple way for investors to put their Ethereum holdings to work, enabling them to access USD to meet their needs without liquidating their holdings according to the announcement. The crypto custodian also offers staking services for additional yields on Ethereum
The digital asset bank holds on to the ETH, using it as collateral should a client be unable to repay the dollar loan. Clients with large ETH holdings will be able to access a larger line of credit. Anchorage already provides Bitcoin-backed loans through other capital providers.
Ethereum-backed loans may be under collateralized if the borrower passes appropriate risk due diligence checks according to Anchorage co-founder Diogo Mónica.
Dave Mansfield, CEO of BankProv, said that Anchorage’s collateral management tech is “world-class”, adding